What are regulations on global minimum tax declaration in Vietnam?

What are regulations on global minimum tax declaration in Vietnam?

Based on Article 6 of Resolution 107/2023/QH15, the global minimum tax declaration is regulated as follows:

- Regarding the regulation on supplementary domestic corporate income tax complying with the minimum standards:

The deadline for submitting the Information Declaration Form, Supplementary Corporate Income Tax Declaration Form accompanied by an Explanation Statement on discrepancies due to differences in financial accounting standards, and for paying the supplementary corporate income tax: No later than 12 months after the end of the fiscal year.

- Regarding the regulation on aggregating the minimum taxable income:

The deadline for submitting the Information Declaration Form, Supplementary Corporate Income Tax Declaration Form accompanied by an Explanation Statement on discrepancies due to differences in financial accounting standards, and for paying the supplementary corporate income tax:

No later than 18 months after the end of the fiscal year for the first fiscal year; no later than 15 months after the end of the fiscal year for subsequent fiscal years.

What are regulations on global minimum tax declaration in Vietnam? (Image from the Internet)

What are the 07 entities subject to global minimum tax in Vietnam?

Based on Article 2 of Resolution 107/2023/QH15, the 07 entities not subject to global minimum tax include:

- Governmental organizations;- International organizations;- Non-profit organizations;- Pension funds;- Investment funds as the ultimate parent entity;- Real estate investment organizations as the ultimate parent entity;- Organizations with at least 85% of the asset value directly or indirectly owned through the above-mentioned organizations.

What is the group subject to the global minimum tax in Vietnam as defined in Resolution 107?

Based on Article 3 of Resolution 107/2023/QH15, it is regulated as follows:

Terminology Explanation

In this Resolution, the following terms are understood as follows:

1. Global Base Erosion Anti-avoidance Measures are the regulations in this Resolution and the regulations of the Government of Vietnam compatible with the global minimum tax rules of the Inclusive Framework on BEPS (Base Erosion and Profit Shifting) of which Vietnam is a member (hereinafter referred to as global minimum tax Rules).

2. Group refers to one of the following cases:

a) A collection of companies, organizations with interrelated relationships through ownership or control, whereby the assets, liabilities, income, expenses, and cash flows of those companies and organizations are incorporated in the consolidated financial statements of the ultimate parent company, and the companies and organizations excluded from the consolidated financial statements due to scale, materiality, or held for sale.

b) A company resident in one country with one or more permanent establishments in another country, under the condition that the company is not part of another group's company or organization.

3. Multinational Group is a group with at least one constituent entity or one permanent establishment not residing in the same country as the ultimate parent company.

4. Ultimate Parent Company is a company in a multinational group that has control or direct or indirect ownership of other companies or organizations in the multinational group, not controlled or owned by any other company or organization, and whose consolidated financial statements are not incorporated in the consolidated financial statements of any other company or organization globally.

5. Intermediate Parent Company is a constituent entity in a multinational group (not the ultimate parent company, partially owned parent company, permanent establishment, or investment company) that directly or indirectly holds ownership of another constituent entity in the same multinational group.

6. Partially Owned Parent Company is a constituent entity in a multinational group (not the ultimate parent company, permanent establishment, or investment company) and meets the following conditions:

a) Directly or indirectly holds ownership of other constituent entities in the multinational group;b) More than 20% of the beneficial interest is directly or indirectly held by companies or organizations not part of the multinational group.

...

Resolution 107/2023/QH15 has clearly explained the group subject to the global minimum tax as one of the following cases:

- A collection of companies, organizations with interrelated relationships through ownership or control, whereby the assets, liabilities, income, expenses, and cash flows of those companies and organizations are incorporated in the consolidated financial statements of the ultimate parent company, and the companies and organizations excluded from the consolidated financial statements due to scale, materiality, or held for sale;

- A company resident in one country with one or more permanent establishments in another country, under the condition that the company is not part of another group's company or organization.